| Futures Trading Markets Speculators: |
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  Futures Trading Speculators:
To speculate in futures contracts oil futures, gold futures or other commodities, first you must decide with the help of your futures investment broker or investment advisor what futures to buy and when. If you decide to speculate in the futures markets, or any futures commodities, gold futures or oil futures contracts, only buy when you are confident in your analysis and decision that the futures commodity you are going to buy, will increase in value within the time frame you set with your futures broker. After you place your order to buy futures contracts, if someone takes the opposite side of your trade it possibly could be a hedger or another speculator who has a different opinion from your own as to what direction the futures contracts price will be.
Speculators in the futures markets are firms, manufactures and companies that are trying to predict or anticipate what futures contracts prices will rise or fall and when this will happen, and profit from it. The main reason many manufacturers or companies hedge is to profit, and to offset any higher costs of production going forward.
Trading futures markets: Going Long
Someone who researched the futures markets on their own or with an investment adviser and is confident in their decision to buy futures contracts, with the anticipation that later you will be able to sell the futures contracts at a higher price. This is known as going long.
Trading futures markets: Going Short
Going short is the opposite of going long, here your are anticipating that the futures contracts will go down or drop in price and you would buy back at the lower price to cover your short. The futures price difference from when you executed your short trade and when you bought back at the lower price is your profit. If the futures contracts price increased in value from the time you executed the short trade until you covered or bought back, you would have a loss.
Article By: PTC / David L. Lawrence
Level2StockQuotes.com
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